South Africa Lifts Rates to 7% After Surprise First-Quarter Growth

South Africa’s economy grew a better-than-expected 0.5% quarter-on-quarter in the first quarter, even as the Reserve Bank raised its key repo rate by 25 basis points to 7% — its first hike in three years — to counter inflation pressure tied to higher oil prices from the Middle East conflict. The rand has traded around 16.4 to 16.5 per dollar.

For the diaspora, the effect is two-sided: higher local rates lift returns on rand savings but raise borrowing costs on home loans, while the rand’s swings drive the value of every transfer. Expect the central bank to stay defensive while oil stays elevated.